Essential Insights on Valuation Practices for Business Stability
"Explore the significance of accurate valuation data in maintaining business stability and financial market integrity. Learn about key historical developments, the role of valuation across business cycles, and the importance of valuation in various aspects of business operations. Discover why valuation is crucial for transactions, regulatory compliance, accounting practices, and more."
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CMAI RVO Tuesday, April 30, 2019, Delhi on CONTINUING EDUCATION PROGRAMME Gagan Ghai FCA, ACMA, CVA, FIV 9899 522 635 Gagan@crestcapitaladvisors.com
Key Pointers Valuation Scenario History Importance Statues 30-04-2019 CEP CMA RVO on Valuation 2
Valuation Accurate valuation data is essential to business and to the stability of our financial markets. Businesses rely on valuation data to: Establish the underlying value of their assets Make informed and de-risked investment decisions Comply with financial reporting rules and regulations Compare and benchmark asset performance Manage risk effectively Inaccurate and poor quality valuations add risk and hinder business. Poor valuations erode business and public trust and undermine stability in the financial system 30-04-2019 CEP CMA RVO on Valuation 3
History 1957 1990 1992 1994-99 2010-2014 2009-2010 2013 2016 Wealth Tax Rules CCI Fixed Pricing NAV, PECV, MV(Listed ) SEBI- IPO Pricing via MB ICAI Technical Guide on Valuation RBI FDI Valuations via DFCF Method Income Tax Issued Valuation for transfer of shares and ESOPs Registere d Valuation Rules IND AS initially for listed companie s then for others year wise 30-04-2019 CEP CMA RVO on Valuation 4
Valuation across cycle Valuation is required in every phase of business cycle 30-04-2019 CEP CMA RVO on Valuation 5
India M&A 30-04-2019 CEP CMA RVO on Valuation 6
India M&A 30-04-2019 CEP CMA RVO on Valuation 7
India PE, VC deals 30-04-2019 CEP CMA RVO on Valuation 8
Indian Angel deals 30-04-2019 CEP CMA RVO on Valuation 9
Why Valuation Transactional Regulatory Accounting Mergers Acquisitions Fund Raising Business Sale Voluntary assessments RBI Income Tax SEBI Companies Act Stock Exchange IBC Courts ESOPs Purchase Price allocations Impairments IND AS Fair Value 30-04-2019 CEP CMA RVO on Valuation 10
Companies Act 2013 The Companies Act 2013 prescribes Valuation by a registered valuer under the following Sections: Section 62 (c) Issue of shares on rights basis Section 192 (2) Non cash transactions with Directors Section 230 Compromise or arrangement with creditors and members Section 236 Purchase of minority shareholding Section 247- Registered Valuer Section 260- Valuation in respect of Shares and Assets to arrive at the Reserve Price for Company Administrator Section 281- Valuing assets for submission of the report by Company Liquidator Section 305- Report on Assets for declaration of solvency in case of the proposal to wind up voluntarily Section 319- Valuing interest of any dissenting member under Power of Company Liquidator to accept shares etc., as consideration for sale of the property of the company 30-04-2019 CEP CMA RVO on Valuation 11
SEBI Regulations Takeover Code Rights Issue Direct Acquisition Indirect Acquisition Preferential Allotment Listing Agreement opinions Buyback issues 30-04-2019 CEP CMA RVO on Valuation 12
RBI Guidelines Inbound Investments> Internationally accepted method at arms length > By CA/MB Outbound investments> Valuer discretion> MB>5mio USD, else CA 30-04-2019 CEP CMA RVO on Valuation 13
Income Tax Act Section 56 rw Rule 11UA Transfer Pricing 30-04-2019 CEP CMA RVO on Valuation 14
IND AS As accounting standards (IND AS) in India are getting aligned to the international standards (IFRS), one of the most important changes faced by Indian corporates is the use of fair value as a measurement base for valuing many of their assets and liabilities. This can bring about a lot of volatility and subjectivity to financial statements. IND AS 113 IND AS 103 IND AS 38 IND AS 16 IND AS 36 IND AS 40 IND AS 102 IND AS 109 30-04-2019 CEP CMA RVO on Valuation 15
Full Service Valuation firm since 2004. >Business >Brands >Assets New Delhi Mumbai Kolkatta Gagan Ghai 9899522635 Gagan@crestcapitaladvisors.com B-1, Ansal Chambers-2, Bhikaji Cama Place, New Delhi
